The Supreme Court has issued landmark directions to safeguard homebuyers and overhaul India’s real estate sector, emphasising that housing is a fundamental right under Article 21 of the Constitution. The bench of Justices JB Pardiwala and R Mahadevan stressed that reforms are vital to restore faith in tribunals, protect buyers, and curb speculative practices that have left families stranded with incomplete homes.
“Having invested their lifelong savings in pursuit of a home, many are compelled to shoulder a double burden, servicing EMIs on one hand, and paying rent on the other – only to find their ‘dream home’ reduced to an unfinished building,” the Court observed on Friday, highlighting the strain on citizens’ dignity, productivity, and health.
The Court cautioned against misuse of the Insolvency and Bankruptcy Code (IBC), noting it is meant to revive viable projects rather than serve as a tool for individual recovery. “Despite robust demand, the sector has been plagued by delays, defaults, and lack of accountability, leaving countless families without possession of homes despite having invested their life savings,” it said.
Among the sweeping measures, the Court ordered NCLTs and NCLATs to improve infrastructure, fill vacancies urgently, and create additional benches for IBC cases. Real Estate Regulatory Authorities (RERAs) must employ legal experts and consumer advocates, ensuring thorough diligence before project approvals.
Also read: What led to the fall in investments in the Real Estate?
All residential transactions must now be registered once 20% of the cost is paid. Funds for early-stage projects should be held in escrow and released in phases per RERA plans. Allottees are to be represented in Committees of Creditors, while senior citizens must receive special contractual safeguards.
The Court also directed the creation of a high-powered committee within three months, chaired by a retired High Court judge and including officials from the law and housing ministries, NITI Aayog, NIUA, and IIMs. The committee will recommend reforms to strengthen transparency, credibility, and accountability in the sector.
To prevent viable projects from collapsing, the government is urged to explore revival funds under NARCL or expand the SWAMIH Fund. Unsold inventory may be used for affordable housing schemes like PMAY. Public funds under SWAMIH must undergo regular audits by the CAG and reports made accessible to the public.
Follow us
